Coelacanth

Market Predictions: 'Crazy' About the Dollar

Excellent piece Louis....and yes I agree the euro has much longer slide to go. Siesmic shifts don't occur like this all the time and investors would do well to take advantage of what's happening now.

It was interesting this week to see euro-zone, French, Italian & German GDP growth for the 2nd qtr. were all negative. Despite Trichet's hawkish stance I suspect euro-zone slowing will become more and more pronounced in the coming weeks and months The cacophony of calls to lower rates will only get louder and louder.

The BOE's quarterly inflation report this week was striking in how dovish it seemingly was....almost hinting rate cuts may come even before CPI, PPI and import/export input indicators show signs of slowing. The idea being that as long as it was evident that inflation had peaked or was cresting....rate cuts would happen sooner rather than later.

My suspicion is the same may happen in euro-land and that markets haven't priced in this possibility.